Let’s suppose that a 45-year-old man by the name of Eric happens to be in exceptional health and he requires $500,000 of life insurance protection. A life insurance agent in Cincinnati convinces this gentleman that he should purchase a whole life insurance policy. The policy holder would be required to invest $613.83 each month into this whole life insurance policy.

After 20 years of premium payments Eric invest a total of $147,320.  Let’s assume that a financial emergency occurs and Eric needs to cash out his whole life insurance policy.  The guaranteed cash value would only amount to be approximately $148,310

In this scenario the life insurance company is paying the policyholder less than a 1% return. The life-insurance company will invest those premium dollars and make 6 to 10 times more than what they would pay to the policyholder! This is why permanent life insurance is so profitable to insurance companies. 

Naturally if the policyholder would die in this time the beneficiaries would collect the $500,000 death benefit.

Permanent Life Insurance Policies Are Also Profitable to Insurance Agents.

In this example the life-insurance agent could earn nearly a $7000 commission by selling this policy to Eric. In contrast if this Cincinnati life insurance agent sold Eric a term life insurance policy he may have only earned as much as $1000!  (Commissions paid to life-insurance agents in Cincinnati range anywhere from 40%-120% of the premium.)

There are many financial incentives for insurance companies to promote permanent life insurance policies versus term insurance. Life insurance agents in Cincinnati also have strong financial incentives to sell permanent policies versus term insurance policies.

What’s the Best Type of Life Insurance Policy in Cincinnati? 

In most cases term life insurance is best. There are circumstances where permanent life insurance policies are appropriate such as estate tax planning, business life insurance in Cincinnati, and final expense life insurance to pay for funeral expenses. (You should not purchase a term life insurance policy if you need the coverage to last for your entire life.)

Contact the Cincinnati Life Insurance Experts